Offshore conference rides wave of deep-water production

An attendee views a Survival Systems International Inc. lifeboat displayed at the company's booth during the 2013 Offshore Technology Conference (OTC) in Houston, Texas, U.S., on Tuesday, May 7, 2013. The Offshore Technology Conference (OTC) is organized and operated to promote and further the advance of scientific and technical knowledge of offshore resources and environmental matters. Photographer: Aaron M. Sprecher/Bloomberg less

An attendee views a Survival Systems International Inc. lifeboat displayed at the company's booth during the 2013 Offshore Technology Conference (OTC) in Houston, Texas, U.S., on Tuesday, May 7, 2013. The ... more

Photo: Aaron M. Sprecher

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Attendees make their way through the OTC Parkway during day three of the Offshore Technology Conference at Reliant Center Wednesday, May 8, 2013, in Houston. (Cody Duty / Houston Chronicle)

Attendees make their way through the OTC Parkway during day three of the Offshore Technology Conference at Reliant Center Wednesday, May 8, 2013, in Houston. (Cody Duty / Houston Chronicle)

Photo: Cody Duty, Staff

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Attendees look at a model of an oil well platform during day two of the Offshore Technology Conference at Reliant Center Tuesday, May 7, 2013, in Houston. (Cody Duty / Houston Chronicle)

Attendees look at a model of an oil well platform during day two of the Offshore Technology Conference at Reliant Center Tuesday, May 7, 2013, in Houston. (Cody Duty / Houston Chronicle)

Photo: Cody Duty, Staff

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More than 104,000 people from approximately 130 countries attended the Offshore Technology Conference last year.

More than 104,000 people from approximately 130 countries attended the Offshore Technology Conference last year.

Photo: Cody Duty, Staff

Offshore conference rides wave of deep-water production

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At a time when the surge in U.S. onshore shale production is getting a lot of headlines, leaders of the energy industry will turn their attention seaward this week in Houston.

Domestic offshore production is set for a surge of its own, and that will be part of the buzz as more than 90,000 executives, scientists, engineers and others converge on NRG Park through Thursday for the annual Offshore Technology Conference.

Four years after a massive oil spill and a resulting partial drilling moratorium slowed things down, large development projects in deep and ultradeep Gulf waters have come online. Gulf production is expected to increase 35 percent to a record 1.9 million barrels per day by 2016, according to analysts at Wood MacKenzie.

"The offshore industry is alive and well - and growing," said Ed Stokes, marine project manager at ConocoPhillips and chairman of the OTC, now in its 45th year.

That doesn't mean the seas are completely smooth.

Some offshore projects beyond the Gulf have struggled. Shell has put its offshore work in Alaska's Arctic on hiatus. North Sea production declines continue yearly. And the consortium developing Kazakhstan's Kashagan field recently announced another major setback.

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"The cost for project implementation is going up," Stokes said. "The problem is the oil price is not going up with it. Companies have an amount of money to spend, and they're going to spend it the most effective way they can."

The compression in capital spending, and what it means for the offshore sector, is among the hot topics on the OTC's extensive agenda this year.

Other areas of focus include how the industry can improve safety; the biggest projects in the industry pipeline; and what types of technology hold the most promise.

Ramanan Krishnamoorti, a University of Houston petroleum engineering professor who leads the school's energy initiatives, will tout the university's new graduate certificate program in upstream safety at the conference. The school views OTC as a prime opportunity to target the offshore workforce.

"We talked to a lot of industry folks," Krishnamoorti said. "They told us (safety) has become a real critical challenge for them in various places."

Last year, the conference at NRG Park, then called Reliant Park, drew more than 104,000 attendees from some 130 countries, according to event organizers. In addition to high-level policy talks and technical panels on topics such as down-hole sensing, pipe technology and well capping, attendees strolling 650,000 square feet of exhibition space will encounter more than 2,700 vendors and suppliers hawking their offerings - and no doubt their swag as well.

Among the big-name speakers at this year's event are John Mingé, BP America's president, who speaks Monday morning about the country's changing energy landscape as oil imports are falling and liquefied natural gas exports - unheard-of before the surge in conventional production from dense rock - are poised to increase.

Marathon Oil CEO Lee Tillman joins a panel of energy-sector executives that afternoon to discuss how the unconventional revolution is affecting the offshore business. In particular, the panel will examine how the two compete for talent, investment and technology.

On Tuesday morning, attendees will get the Washington perspective from U.S. Rep. Bill Flores, R-Bryan, a member of the House Committee on Natural Resources, and Christopher Smith, principal deputy assistant secretary for fossil energy. That afternoon, Brian Salerno, who leads the Bureau of Safety and Environmental Enforcement, will join Smith to discuss federal oversight of the industry.

General Electric Chairman Jeff Immelt addresses attendees Wednesday. He's slated to highlight the industry's need to invest in education and research and development. GE made waves in the energy sector following an announcement earlier this year that it plans to spend an additional $10 billion through 2020 on "ecomagination" projects such as its collaboration with Statoil to evaluate the potential for carbon dioxide to replace water in hydraulic fracturing.

Many speakers from abroad join the lineup, including Michael Fallon, the UK's Minister of State for Business and Energy, who will discuss what declining production in the North Sea means for his country and what can be done to stimulate production in the future.

Gustavo Hernández Garcia, head of exploration and production at Petróleos Mexicanos, or Pemex, will attend several sessions throughout the week as well.

Mexico is likely to be a hot topic throughout the conference on the heels of last year's passage of constitutional amendments that open the country's energy sector to private investment for the first time in decades. The move is seen as groundbreaking for both the country and the industry, as it lifts Pemex's monopoly on the country's energy resources.

"It's really new. It was 1938 the last time anyone was able to do anything in Mexico," Stokes said. "This is a pretty big thing."

Stokes, who began his career as an offshore driller in the 1970s, said the conference is meant to serve as a forum to help the industry improve. "What we're providing is a venue for people working on different kinds of technologies and innovations," Stokes said. "We give them a stage, in a way, to present, and what we're hoping is … to get an opinion out and start a dialogue."

And if professionals get a chance to see some of the latest technology up-close and in person, that's OK, too. "It's marvelous, it's colorful, and it's a lot of excitement," Stokes said.